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Los Angeles-Long Beach-Glendale Metro Area Home Prices Up 5.2% Year-Over-Year

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First American Data & Analytics, a leading national provider of property-centric information, risk management and valuation solutions and a division of First American Financial Corporation, this week released its September 2023 Home Price Index (HPI) report. The report tracks home price changes at the national, state and metropolitan (Core-Based Statistical Area or CSA) levels and includes metropolitan price tiers that segment sales transactions into starter, mid and luxury tiers.

“Rising mortgage rates continue to depress housing supply and suppress affordability, chilling the housing market. Preliminary September house price data suggests that the lack of supply is constraining the market more than reduced demand due to record-low affordability,” said Mark Fleming, chief economist at First American. “Nationally, house prices continue to set new records as potential sellers sit on the sidelines, limiting supply, while buyers chase what few homes are available for sale.”

In the Los Angeles-Long Beach-Glendale metropolitan area, home prices increased by 5.2% in September 2023 compared with a year ago and increased by 0.3% compared with August 2023. See below for price-tier data.

Price-Tier Data for September 2022 to September 2023The First American Data & Analytics HPI segments home price changes at the metropolitan level into three price tiers based on local market sales data: starter tier, which represents home sales prices at the bottom third of the market price distribution; mid-tier, which represents home sales prices in the middle third of the market price distribution; and the luxury tier, which represents home sales prices in the top third of the market price distribution.

CBSA
Starter
Mid-Tier
Luxury
Los Angeles-Long Beach-Glendale
5.1%
4.2%
7.4%

“The fact that the starter home price tier continues to outperform the middle and luxury price tiers in many markets suggests that first-time home buyer demand remains resilient despite significantly lower affordability,” said Fleming.

“As of 2022, more than half of all millennial households were homeowners, but many more are aging into their 30s, the prime home-buying age, and seeking to buy instead of rent. While less affordable than a year ago, the pace of starter tier price growth in markets like Miami, Pittsburgh and St. Louis suggests homeownership demand among millennials is far from dead.”

California HPIIn California, nominal house prices increased 3.2% on a year-over-year basis. Nationwide, nominal house prices increased on a year-over-year basis in 48 states, while house prices decreased in only two states, South Dakota and Nevada, in September 2023.

September 2023 National HPI HighlightsThe First American Data & Analytics’ non-seasonally-adjusted (NSA) House Price Index (HPI) showed that nationally in September 20231:

  • Between August 2023 and September 2023 house prices increased 0.7 percent.
  • House prices increased 6.3 percent between September 2022 and September 2023.
  • House prices reached a new peak for the sixth month in a row in September 2023.
  • House price growth reported in last month’s HPI for July 2023 to August 2023 was revised down 0.2 percent, from 0.7 percent to 0.5 percent.

Next ReleaseThe next release of the First American Data & Analytics House Price Index will take place the week of November 13, 2023.

First American Data & Analytics HPI MethodologyThe First American Data & Analytics HPI report measures single-family home prices, including distressed sales, with indices updated monthly beginning in 1980 through the month of the current report. HPI data is provided at the national, state and CBSA levels and includes preliminary index estimates for the month prior to the report (i.e. the preliminary result of July transactions is reported in August). The most recent index results are subject to revision as data from more transactions become available.

The HPI uses a repeat-sales methodology, which measures price changes for the same property over time using more than 46 million paired transactions to generate the indices. In non-disclosure states, the HPI utilizes a combination of public sales records, MLS sold and active listings, and appraisal data to estimate house prices. This comprehensive approach is particularly effective in areas where there is limited availability of accurate sale prices, such as non-disclosure states. Property type, price and location data are used to create more refined market segment indices. Real Estate-Owned transactions are not included.

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